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Autor:   •  March 18, 2011  •  Essay  •  1,040 Words (5 Pages)  •  1,416 Views

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55.24% Payments received for wrongful dismissal where the payment was in substitution for lost earnings is assessable. In addition, amounts received as an inducement to sign a contract of employment are generally income. In relation to his earnings from the labour hire firm, his assessable income will be the gross earnings ($1,200) that are to be included in assessable income.

71.00% If a payment does not have the features of a royalty, it will not be assessable. In this question it could be argued that the payments received by Kate do not come within the definition of royalty and therefore are not assessable, but may be subject to capital gains tax. Note that the sale may be considered to be the sale of a capital asset rather than the receipt of royalties.

37.53% In accordance with the decision in Myer Emporium, it is clear that the $24 million received for the sale of the right to the interest income is assessable. The amount received for the sale of the right to receive the principal in 10 years is unlikely to be income as the payment represents a payment on capital account - see the decision in the Orica case. It may require a consideration of capital gains tax. The position may be different if Dire was a financial institution and the transaction was in the ordinary course of its business, see Unilever case.

80.26% The furniture is a collectable and the reduced cost base as defined in s 110-55 of the ITAA97 includes the five elements of the cost base but the normal third element of the cost base is replaced by an alternative third element. In addition, because the asset is a collectable it will not have any third element costs (s 108-17 and 108-30). Thus, the repair expense of $230 will not be included in the cost base. The reduced cost base will not include indexation of its elements so option 5 will not be correct. The cost of purchasing the furniture or $3,500 will be included in the first element of the cost base. The $2,300 will also be included in the fourth element of the cost base as it is a capital improvement with the purpose or expected effect of increasing or preserving the value of the bed.

84.24% Section 108-10(1) of the ITAA97 provides that losses from collectables can be offset against gains from collectables but cannot be offset against other gains. The antique is subject to CGT as it was acquired for more than $500. The relevant gain is $1,450 ($2,000 - $550) and this is offset against $1,450 of the collectable loss from the year ended 30 June 2006. The remaining collectable loss is carried forward to future years but is not a loss in the current year. The gain on the disposal of the land is $26,000 and this must be first reduced by the carried forward loss of $9,000 to give a gain of $17,000. The $17,000 attracts


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